1

Let's say hypothetically $10,000 of RSU vested this past year.

My employer has listed $10,000 of RSU onto my W-2 in Box 14.

I elected sell-to-cover so now I'm left with ~$5,500 after the sell-to-cover.

The 1099-B imported from E-Trade says I had a transaction with sell price ~$4,500.

What cost basis should I report for that transaction? Is it $10,000? Or $5,500?

3

You wouldn't fill out a 1099, your employer would or possibly whoever manages the stock account.

The 1099-B imported from E-Trade says I had a transaction with sell price ~$4,500.

Yes. You sold ~$4500 of stock to pay income taxes. Both the cost basis and the sale price would probably be ~$4500, so no capital gain. This is because you received and sold the stock at the same time. If they waited a little, you could have had a small gain or loss.

The remainder of the stock has a cost basis of ~$5500.

There are at least two transactions here.

  1. Receive ~$10,000 worth of stock. Cost basis of ~$10,000.
  2. Sell ~$4500 worth of stock. Cost basis of ~$4500.

In the future you may sell the remaining stock. It has a cost basis of ~$5500. Sale price of course unknown until then. You may break that into different pieces. So you might sell $500 of cost basis for $1000 with a ~$500 capital gain. Then later sell the remainder for $15,000 for a capital gain of ~$10,000.

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